Smith & Wesson Brands Inc (0HEM.L) reported a soft QQ1 2025 with revenue of $88.33 million, marking a 22.68% year-over-year decline and a 44.50% sequential drop from the prior quarter. Gross profit stood at $24.19 million, yielding a gross margin of approximately 27.4%, while operating income was negative at $1.86 million and net income came in at a loss of $2.11 million. Earnings per share were negative at $(0.0465). EBITDA for the quarter was $6.19 million, with an EBITDA margin of about 7.0%. The company generated negative operating cash flow of $30.82 million and negative free cash flow of $35.54 million, driven by a substantial working capital use (change in working capital of $(38.56) million) and inventory drawdown dynamics. Cash at period end was $35.52 million, and gross debt stood at $107.18 million, yielding a net debt of $71.67 million. Total assets reached $571.27 million, with total liabilities of $193.28 million and stockholders’ equity of $377.99 million, indicating a solid equity base despite near-term cash burn. The near-term narrative centers on improving top-line momentum and margins, managing working capital, and arresting cash burn, while leveraging the brand and manufacturing capabilities to stabilize profitability in a challenging consumer firearms environment. Investors should monitor operating cash flow stabilization, margin recovery, and liquidity resilience as catalysts for a favorable trajectory.